Friday, January 23, 2015

Manufacturing Still Matters in Pennsylvania

Industry Accounts for 9.8% of State Employment and $77.4 Billion in GDP

HARRISBURG (Jan. 23, 2015) – Manufacturing is still a large and vital part of the Pennsylvania economy despite misguided policies that have shrunk manufacturing employment and hurt its international competiveness, according to The Manufacturing Footprint and the Importance of U.S. Manufacturing Jobs, a new study from Robert E. Scott, Director of Trade and Manufacturing Policy Research at the Economic Policy Institute.

Manufacturing directly employs over half a million Pennsylvania workers (563,500)—one in every 10 Pennsylvania jobs. All told (counting indirect supply-chain jobs—engineering services, marketing, etc.—and jobs created by the spending of manufacturing wages and profits), manufacturing accounts for 21.3 percent of employment in the United States—a total of 29.1 million jobs. Moreover, manufacturing jobs are high quality jobs. On average, manufacturing workers earned $2.52 more an hour than other workers in 2012 and 2013. According to the Center for Workforce Information and Analysis, manufacturing wages average about $54,000 in Pennsylvania compared to less than $47,000 in the rest of the economy.

Manufacturing was responsible for 12% of Pennsylvania’s gross domestic product in 2013, or $77.4 billion.

“Manufacturing is not the dying or outdated sector of the economy it’s frequently made out to be,” said Stephen Herzenberg, economist and executive director of the Keystone Research Center. “On the contrary, manufacturing is still an important part of the state economy. It is a source of good jobs, and policymakers should work to shore up and expand our manufacturing sector in Pennsylvania and throughout the country.”

Nearly 20 years of policy failures have eroded U.S. manufacturing. From 1998-2013, Pennsylvania lost 314,000 manufacturing jobs. However, there are steps that can be taken to reverse manufacturing’s decline. In the paper, Scott identifies reducing currency manipulation, shrinking the U.S. trade deficit, and investing in infrastructure and research and development as key ways to rebuild and expand U.S. manufacturing.

An online interactive map allows members of the media and public to access data on the importance of manufacturing in their congressional district, and shows which industry sectors account for the most jobs. A glance at the map of Pennsylvania shows that rural areas through Pennsylvania’s “T” and York, Lancaster, the Lehigh Valley, Reading, and Erie are all areas with above-average shares of manufacturing jobs. The map also shows that all but a couple of Pennsylvania’s 18 congressional districts have a manufacturing employment share near or above the national average. “Pennsylvania’s 13 Republican and five Democratic congressional representatives should be leading proponents of the manufacturing agenda in the United States Congress,” Herzenberg said.

Within Pennsylvania, strong bipartisan support also exists for manufacturing. Gov. Wolf’s “Made in PA” plan highlights the potential to boost innovation, capitalizing on Pennsylvania’s 130 higher education institutions, and the need for 21st century workforce initiatives, including apprenticeship. Former Gov. Corbett’s Team Pennsylvania Manufacturing Advisory Council mapped out an array of state workforce, innovation, and financial initiatives that would boost manufacturing.
“Manufacturing in Pennsylvania is ripe for bipartisan cooperation to create more jobs that pay,” Herzenberg said.

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